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[Editorial] Duplicity on speculation

Popular trust in real estate policies crumbles, Cheong Wa Dae, DP rush excessive measures

President Moon Jae-in’s replacement of Kim Sang-jo, his top Cheong Wa Dae aide on policy, shows the double standards and the hypocrisy of those in power who apply the yardstick strictly to the public but loosely to themselves.

Kim offered his resignation over seething popular criticism for raising the jeonse deposit on his apartment unit 120 million won ($105,000), or 14 percent, two days before revised house leasing laws capped deposit hikes at 5 percent. Moon accepted his resignation immediately.

In view of the date of the jeonse renewal, Kim did nothing illegal because he raised the deposit before new laws took effect, but he was the president’s top coordinator of the government’s policies on real estate. His job requires him to be deeply involved in formulating real estate policies. If he had renewed his apartment lease after the laws were enforced, he could not have raised the deposit by 5 percent or more. By a margin of just two days, he could nearly triple the added key money.

Cheong Wa Dae said he needed to raise the deposit because the owner of the house where he lived on jeonse had raised the deposit, too, but he is said to have about 1.4 billion won in the bank.

His behavior goes beyond a cheap trick by a mere high-ranking government official. It has shattered public trust in all of the government’s real estate policies.

Along with the ruling Democratic Party of Korea and related government ministries, he pushed to revise laws to prohibit people from raising jeonse deposits by 5 percent or more, but he himself raised the one on his apartment unit by much more than that. This is hypocrisy and deception.

People are enraged at Korea Land & Housing Corp. employees’ alleged speculations in locations of new towns designated by the government. They are suspected of having used development information they were privy to through their jobs. In the eyes of the public, Kim’s behavior does not differ much from LH employees’ speculation.

Double standards by Moon’s aides are not something that has started just recently. His former chief aide on policy, Jang Ha-sung, said that all the people in Korea do not need to live in Seoul’s expensive Gangnam area, but he lived there. Kim Eui-kyeom, the president’s former spokesman, invested in an old commercial building in a redevelopment area of Seoul while the government was waging a “war on real estate speculation.” Moon’s former chief of staff, Noh Young-min, and his senior secretary for civil affairs, Kim Jo-won, stepped down over issues related to the sales of their apartment units.

Moon said in a meeting on anti-corruption policies that the government must uncover all real estate speculation and deal with speculators severely, whatever office or rank they hold. His words ring hollow.

The ruling party apologized for the Moon administration’s real estate policy failure. But its sincerity is questionable. Sobered by falling poll numbers ahead of the April 7 mayoral by-elections in Seoul and Busan, the party appears to be imploring them for mercy. But it is too late. It is not enough to soothe the anger of the people.

Rather, Cheong Wa Dae and the ruling party are causing concerns with the measures they rushed to announce primarily to show voters that they are doing something to eliminate real estate speculation.

They vowed to find ways to confiscate profits retroactively even from past real estate speculation. They also said they would require all government employees to disclose their personal assets. Currently, only middle- and high- ranking civil servants make their assets public.

The idea of retroactive confiscation invokes controversy over constitutionality. The Constitution stipulates that laws are applicable to crimes committed after the enactment of the laws.

It is questionable if requiring all of the government employees to make their personal assets public is an effective way to respond to real estate speculation.

Real estate speculation stems from the Moon administration’s policy that divides people into those with houses and those without, then suppresses the market under the banner of “the war on speculators.” In the meantime, high-ranking officials take profits with information they got through their jobs. This way, it will not be able to find a way to end real estate speculation